Grayscale’s Bitcoin ETF Sees $556 Million Outflow, Bitcoin Prices Drop Below $39K

Grayscale's Spot Bitcoin ETF Witnessed Significant Outflows

Recent data reveals that Grayscale's spot bitcoin exchange-traded fund (ETF), known as GBTC, has experienced increased outflows. A substantial 14,292.18 bitcoin, valued slightly above $556 million, exited the fund after Monday's trading activities. This marks the largest outflow to date for GBTC, highlighting a notable decrease in its holdings.

GBTC's Holdings Decline, Bitcoin ETFs Trade Volume Soars

Grayscale's spot bitcoin ETF holdings have declined from 566,973.40 BTC on Friday to 552,681.22 BTC currently. Since January 12, 2024, the fund has witnessed a decrease of roughly 64,398.77 BTC, now valued at just over $2.5 billion. On January 22, spot bitcoin ETFs recorded a trade volume of $2.09 billion, with GBTC contributing $1.08 billion to this total.

Blackrock's IBIT and Fidelity's Wise Origin Gain Ground

Blackrock's IBIT spot bitcoin ETF has seen an uptick in its holdings, currently possessing 39,925.37 BTC as of January 22, 2024. Similarly, Fidelity's Wise Origin spot bitcoin ETF, known as FBTC, now holds 30,169.54 BTC.

Discussion on Social Media and Factors Affecting Bitcoin's Price

Grayscale's outflows and the declining value of bitcoin have sparked widespread discussion on social media platforms. Bitcoin's price has dropped below the $39K threshold. Analysts attribute a portion of GBTC's outflows to investors seeking lower fee alternatives. Additionally, bitcoin miner outflows have also contributed to the market downturn.

Expert Advice for Retail Investors

Blockguard CEO Anthony Bevan advises retail investors to remain calm during this correction. He highlights that large players in the market may manipulate prices to their advantage but emphasizes the importance of staying calm and dollar-cost-averaging into investments. The duration of this downturn remains uncertain, but Bevan predicts a strong wick down to liquidate longs followed by a bounce and slight recovery to establish a new range.

Bitcoin Long Positions Liquidated

Over the last 24 hours, $91.92 million worth of bitcoin long positions have been liquidated, according to coinglass.com metrics.

What are your thoughts on the GBTC outflows and bitcoin's price falling below $39K? Share your opinions in the comments section below.

Frequently Asked Questions

What proportion of your portfolio should you have in precious metals

This question can only be answered if we first know what precious metals are. Precious metals refer to elements with a very high value relative other commodities. This makes them valuable in investment and trading. Gold is by far the most common precious metal traded today.

There are also many other precious metals such as platinum and silver. The price of gold tends to fluctuate but generally stays at a reasonably stable level during periods of economic turmoil. It is also relatively unaffected both by inflation and deflation.

In general, prices for precious metals tend increase with the overall marketplace. However, they may not always move in synchrony with each other. For example, when the economy is doing poorly, the price of gold typically rises while the prices of other precious metals tend to fall. Investors expect lower interest rates which makes bonds less appealing investments.

However, when an economy is strong, the reverse effect occurs. Investors are more inclined to invest in safe assets, such as Treasury Bonds, and they will not demand precious metals. Because they are rare, they become more pricey and lose value.

It is important to diversify your portfolio across precious metals in order to maximize your profit from precious metals investments. You should also diversify because precious metal prices can fluctuate and it is better to invest in multiple types of precious metals than in one.

How is gold taxed within a Roth IRA

An investment account's tax is calculated based on the current value of the account, and not on what you paid originally. So if you invest $1,000 in a mutual fund or stock and then sell it later, any gains are subject to taxes.

If you place the money in a traditional IRA, 401(k), or other retirement plan, there is no tax when you take it out. Only earnings from capital gains and dividends are subject to tax. These taxes do not apply to investments that have been held for more than one year.

These rules vary from one state to another. For example, in Maryland, you must take withdrawals within 60 days after reaching age 59 1/2 . Massachusetts allows you to wait until April 1. New York allows you to wait until age 70 1/2. To avoid penalties, plan ahead so you can take distributions at the right time.

How Do You Make a Withdrawal from a Precious Metal IRA?

You first need to decide if you want to withdraw money from an IRA account. After that, you need to decide if you want to withdraw funds from an IRA account. Next, make sure you have enough money in order for you pay any fees or penalties.

You should open a taxable brokerage account if you're willing to pay a penalty if you withdraw early. If you decide to go with this option, you will need to take into account the taxes due on the amount you withdraw.

Next, you need to determine how much money is going to be taken out from your IRA. This calculation is affected by many factors, such as the age at which you withdraw the money, the amount of time the account has been owned, and whether your plans to continue contributing to your retirement fund.

Once you determine the percentage of your total saved money you want to convert into cash, then you need to choose which type IRA you will use. Traditional IRAs permit you to withdraw your funds tax-free once you turn 59 1/2. Roth IRAs have income taxes upfront, but you can access the earnings later on without paying additional taxes.

Once the calculations have been completed, it's time to open a brokerage accounts. A majority of brokers offer free signup bonuses, as well as other promotions, to get people to open accounts. You can save money by opening an account with a debit card instead of a credit card to avoid paying unnecessary fees.

You will need a safe place to store your coins when you are ready to withdraw from your precious metal IRA. Some storage facilities can accept bullion bar, while others require you buy individual coins. Before you choose one, weigh the pros and cons.

Bullion bars, for example, require less space as you're not dealing with individual coins. However, each coin will need to be counted individually. However, individual coins can be stored to make it easy to track their value.

Some prefer to store their coins in a vault. Some prefer to keep them in a vault. No matter what method you use, it is important to keep your bullion safe so that you can reap its benefits for many more years.

What precious metals can you invest in for retirement?

Silver and gold are two of the most valuable precious metals. They are both simple to purchase and sell, and they have been around for a long time. You should add them to your portfolio if you are looking to diversify.

Gold: Gold is one the oldest forms currency known to man. It is also extremely safe and stable. It is a good way for wealth preservation during uncertain times.

Silver: The popularity of silver has always been a concern for investors. It is an excellent choice for investors who wish to avoid volatility. Unlike gold, silver tends to go up instead of down.

Platinium: Another form of precious metal is platinum, which is becoming more popular. It's like silver or gold in that it is durable and resistant to corrosion. It is, however, more expensive than its competitors.

Rhodium. Rhodium is used as a catalyst. It's also used in jewelry making. It is also very affordable in comparison to other types.

Palladium – Palladium is an alternative to platinum that's more common but less scarce. It's also more affordable. It's a popular choice for investors who want to add precious metals into their portfolios.

Can I buy or sell gold from my self-directed IRA

However, gold can only be purchased with your self-directed IRA. To do so, you must first open a brokerage account at TD Ameritrade. If you already have a retirement account, funds can be transferred to it.

The IRS allows individuals to contribute up to $5,500 annually ($6,500 if married and filing jointly) to a traditional IRA. Individuals can contribute up $1,000 per annum ($2,000 if they are married and jointly) directly to a Roth IRA.

You might want to purchase physical bullion, rather than futures contracts if you are going to invest in gold. Futures contract are financial instruments that depend on the gold price. You can speculate on future prices, but not own the metal. Physical bullion, however, is real gold and silver bars that you can hold in your hand.

Should You Invest Gold in Retirement?

It depends on how much you have saved and if gold was available at the time you started saving. If you're unsure about which option to choose then consider investing in both.

In addition to being a safe investment, gold also offers potential returns. This makes it a worthwhile choice for retirees.

Although most investments promise a fixed rate of return, gold is more volatile than others. Therefore, its value is subject to change over time.

This does not mean you shouldn’t invest in gold. It just means that you need to factor in fluctuations to your overall portfolio.

Another benefit of gold is that it's a tangible asset. Gold is much easier to store than bonds and stocks. It is also easily portable.

As long as you keep your gold in a secure location, you can always access it. Additionally, physical gold does not require storage fees.

Investing in gold can help protect against inflation. It's a great way to hedge against rising prices, as gold prices tend to increase along with other commodities.

Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. Gold tends to rise when the stock markets fall.

You can also sell gold anytime you like by investing in it. Like stocks, you can sell your position anytime you need cash. You don’t even need to wait until retirement to liquidate your position.

If you do decide to invest in gold, make sure to diversify your holdings. Do not put all your eggs in one basket.

You shouldn't buy too little at once. Start by purchasing a few ounces. Continue adding more as necessary.

Remember, the goal here isn't to get rich quickly. Instead, the goal is to accumulate enough wealth that you don't have to rely on Social Security.

Gold may not be the most attractive investment, but it could be a great complement to any retirement strategy.

What does gold do as an investment?

Gold's price fluctuates depending on the supply and demand. It is also affected negatively by interest rates.

Due to limited supplies, gold prices are subject to volatility. There is also a risk in owning gold, as you must store it somewhere.

Statistics

If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)

External Links

How To

Guidelines for Gold Roth IRA

Start saving as soon as possible to save for your retirement. As soon as you become eligible, which is usually around age 50, start saving and keep it up throughout your career. To ensure sufficient growth, it is vital that you contribute enough each year.

You can also take advantage of tax-free savings opportunities like a traditional 401k (k), SEP IRA (or SIMPLE IRA). These savings vehicles enable you to make contributions while not paying any taxes on the earnings, until they are withdrawn. This makes them a great choice for people who don’t have access employer matching funds.

The key is to save regularly and consistently over time. You will lose any potential tax advantages if you don't contribute enough.

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By: Jamie Redman
Title: Grayscale's Bitcoin ETF Sees $556 Million Outflow, Bitcoin Prices Drop Below $39K
Sourced From: news.bitcoin.com/gbtc-experiences-record-bitcoin-outflow-blockguard-ceo-advises-investor-calm-amidst-market-shift/
Published Date: Tue, 23 Jan 2024 16:00:43 +0000